PIK

[Clive]

An interesting report in today’s Herald. Audit Scotland claim that government funding has cost the Scottish taxpayer over £31m and that many millions more would be required to sustain the airport in public ownership. An agreement between airport directors and the SG sees no interest or capital repayment until March 2024 which will enable the airport to continue operations for at least the next twelve months.

I can’t quote the whole article however maybe someone can copy a link to read the full article.

AuditsScotland say it is not clear that SG intervention has provided value for tax payers monies.

https://www.glasgowtimes.co.uk/news/232 ... existence/

[Bearsden]

An interesting report in today’s Herald. Audit Scotland claim that government funding has cost the Scottish taxpayer over £31m and that many millions more would be required to sustain the airport in public ownership. An agreement between airport directors and the SG sees no interest or capital repayment until March 2024 which will enable the airport to continue operations for at least the next twelve months.

I can’t quote the whole article however maybe someone can copy a link to read the full article.

AuditsScotland say it is not clear that SG intervention has provided value for tax payers monies.

https://www.glasgowtimes.co.uk/news/232 ... existence/

BUT the auditor's comments only look at the entity itself and not the economic benefits from tenants like Prestwick Aircraft Maintenance (Ryanair), Storm Aviation, HMCG/Bristow etc

Clearly PIK's direct income is mainly driven by military traffic

[hads]

I cant be arsed getting into the politics of this.
However, its clear to Stevie Wonder that this Carbunkle exists purely because the taxpayer sends money to it and allows Ryanair to fly to hotspots which should be departing from Glasgow at the very least.
Im a worn out record on this topic. In any other sphere of commercial business this would have been resolved years ago.
Glasgow will not see a RYR base or anything similar until this is halted.
And from a PIK perspective, I will bet £100 that nothing improves in the medium term.

[Clive]

An interesting report in today’s Herald. Audit Scotland claim that government funding has cost the Scottish taxpayer over £31m and that many millions more would be required to sustain the airport in public ownership. An agreement between airport directors and the SG sees no interest or capital repayment until March 2024 which will enable the airport to continue operations for at least the next twelve months.

I can’t quote the whole article however maybe someone can copy a link to read the full article.

AuditsScotland say it is not clear that SG intervention has provided value for tax payers monies.

https://www.glasgowtimes.co.uk/news/232 ... existence/

BUT the auditor's comments only look at the entity itself and not the economic benefits from tenants like Prestwick Aircraft Maintenance (Ryanair), Storm Aviation, HMCG/Bristow etc

Clearly PIK's direct income is mainly driven by military traffic

Indeed. And the Tories are only concern about this because it was a Scottish Government initiative. The investment is directly comparable to the likes of the Islands Growth Deal which was announced today. Comparable in that government’s invest sums for the economic gain that generates from the investment. Only in this case loan funds will be recouped when a sale takes place. Even if no sale took place and a Tory Govt came in and closed it, throwing the jobs and the asset on the scrap heap, nothing was lost by the investment because it generated jobs and economic activity during the period of government help. They say it was £60m a year. Even if it was a tenth of that we haven’t lost money.

[Bearsden]

I cant be arsed getting into the politics of this.
However, its clear to Stevie Wonder that this Carbunkle exists purely because the taxpayer sends money to it and allows Ryanair to fly to hotspots which should be departing from Glasgow at the very least.
Im a worn out record on this topic. In any other sphere of commercial business this would have been resolved years ago.
Glasgow will not see a RYR base or anything similar until this is halted.
And from a PIK perspective, I will bet £100 that nothing improves in the medium term.

PIK has not received any further direct SG funding since March 2020 (total loan funding £43.4m) - yes PIK has not paid its accumulated interest of £7.3m at March 2022 but it was sitting with Cash on Hand of £15.7m

So a net £35m is frankly negligible in the SG budget (as a comparison, AGS net bank debt at Sep 30 2022 stood at £696m, with shareholder debt taking it up to nearer £1 billion!)

If AGS was the preferred bidder then they must have had a good look at the books, so if the revenue from the Ryanair pax operation was not covering its direct costs (and I use the term 'direct costs' quite deliberately) then they could easily challenge the position today as 'a state subsidy'

[Clive]

I cant be arsed getting into the politics of this.
However, its clear to Stevie Wonder that this Carbunkle exists purely because the taxpayer sends money to it and allows Ryanair to fly to hotspots which should be departing from Glasgow at the very least.
Im a worn out record on this topic. In any other sphere of commercial business this would have been resolved years ago.
Glasgow will not see a RYR base or anything similar until this is halted.
And from a PIK perspective, I will bet £100 that nothing improves in the medium term.

PIK has not received any further direct SG funding since March 2020 (total loan funding £43.4m) - yes PIK has not paid its accumulated interest of £7.3m at March 2022 but it was sitting with Cash on Hand of £15.7m

So a net £35m is frankly negligible in the SG budget (as a comparison, AGS net bank debt at Sep 30 2022 stood at £696m, with shareholder debt taking it up to nearer £1 billion!)

If AGS was the preferred bidder then they must have had a good look at the books, so if the revenue from the Ryanair pax operation was not covering its direct costs (and I use the term 'direct costs' quite deliberately) then they could easily challenge the position today as 'a state subsidy'

Well as I’ve said before, if a challenge arises about illegal state aid and it is upheld then I’d join the chorus of condemnation. We couldn’t have unfair competition which in this case, if confirmed, is effectively keeping a Ryanair base out of GLA.

I’ve asked before if someone wants to raise a FOI request on the matter, that would be good.

But I’m pleased that we have some consensus on the Govt. loan investment and positive economic outcome.

[egpffqtv]

https://www.heraldscotland.com/news/hom ... till-sale/

Minister says state-owned Prestwick Airport is still for sale

MINISTERS are appealing for prospective buyers of state-owned Prestwick Airport as it emerged that executives expected continued multi-money support to keep it in existence.

Public sector auditors have already said it is not clear that government intervention has provided value for the taxpayer pound.

Now business minister Ivan McKee has confirmed that ministers are seeking a private firm to take over the airport.

It was said that the airport was to remain state owned when it was taken off the market at the end of 2021 after the Scottish Government ended talks with a potential private buyer during a selling process in which bids were received from "credible investors”.

Audit Scotland has said that the Scottish Government's propping up of the airport in loans has cost the taxpayer over £31m - and that many million more would be needed to sustain the airport as long as it remains in public hands.

Airport directors have an agreement that ministers will not seek repayment of all or part of the loan facility or the interest until at least March 31, 2024 - which directors say will enable the Ayrshire airport to "continue in operation existence for at least the next 12 months".

Financial papers show that directors believe that support is expected to continue beyond that date "for the foreseesable future".

The losses relate to the £43.8m of public money loan support given to the airport which auditors now say are valued at just £11.6m. Loan interest was valued at £7.4m but that has been valued at 'nil'.

Ministers have so far decided not to recoup any of the £50m it is owed in loans and interest from the state-controlled airport to allow it to remain in existence which has led to concern it has sanctioned unlawful state aid.

Business ministers Ivan McKee said that the airport should return to the private sector as soon as there is a buyer that is able to purchase it. They had to have a solid business plan and money for investment.

"No money has been provided to Prestwick airport since 2019. And the budget makes no provision for additional loan funding as we do not envisage any being required in 2023/24. "The business has been profitable [since 2019], and we've no indication of any other additional funding required in this financial year, and we expect that profitable position to to continue into the future."

Scottish Conservative shadow transport minister Graham Simpson had said that ministers must recoup the money that it paid out.

READ MORE: Prestwick Airport needs taxpayer millions to remain in existence

He told the Public Audit Committee last week: " We don't have detailed insight over what comes next [with Prestwick Airport]. We know that there had been discussions to find a buyer but that has not yet come to fruition. So, I don't have an annualised figure in m ymind to say what the government's support will mean for Prestwick Airport. "But you can see on an annual basis many millions of pounds of public expenditure are being used to support the airport, to sustain jobs and services within the airport. But that would have been the case for as long as it remains in public sector hands."

"We are interested to hear from anybody, any prospective buyers who would come forward and have a conversation about the future of the airport because the future of the airport will be in private sector hands. It is also worth noting that the Auditor General made the comment that we haven't formed a value for money judgement on Prestwick," he said.

He also questioned Audit Scotland's view that many more millions would be needed to sustain the airport as long as it is in public hands.

The airport was taken into public ownership in November 2013 after being purchased by the Scottish Government for £1.

The facility, which was put up for sale the previous year by New Zealand firm Infratil, had incurred annual losses of £2m.

Then deputy first minister Nicola Sturgeon said the deal would help protect the airport and the 1,400 jobs it supported and that work would begin for "turning Prestwick around and making it a viable enterprise".

The Scottish Government has been trying to sell the airport but a preferred bidder pulled out of negotiations in May 2021.

Ministers then re-engaged with the second-placed bidder, but “various concerns” were identified and it was not pursued further.

It is believed the last doomed bid came from Train Alliance UK and was scuppered when it emerged that major repairs are required to the runway.

The finance secretary Kate Forbes early last year said that ministers had decided not to go ahead with selling the airport and that it was in a financially strong position.

Auditor General Stephen Boyle told MSPs last week: "We're not challenging the value that has come from the jobs. But these weren't part of the assessment at the time that the original intervention was made. That's why we are welcoming a stronger framework to make assessments of what the intended outcomes most crucially would be, and part of that is value for money.

"It's not about getting the money back. it's about when public money has been invested, that the intended outcomes are clear as to what's going to be achieved from that. These are long term commitments, taking many millions pounds of public expenditure. And really, for any investment, whether it's public sector, or private sector, when you are investing that amount, it really goes back to the business case. What do you intend to achieve from that?"

The latest financial records show that the owners and operators of Prestwick Airport made a profit of £1.2m in the year to March, 2022, down from £12.8m the previous year. It turned total losses of £19.8m over the three years between 2016/17 and 2018/19.

Mr Simpson said the extra financial support for Prestwick Airport was "supposed to be a temporary measure to protect jobs, until the SNP Government manages to find a buyer" but he added that "in practice it amounts to a loss of almost £32 million – and another £7.4 million in interest – to the taxpayer".

He added: "Since Prestwick is now actually recording profits, the Scottish Government must get its act together and seek to recoup these colossal sums.”

[Clive]

Mr Simpson sounds like a right eejit.

[buddyboy]

Mr Simpson sounds like a right eejit.

What's idiotic about wanting some of the money spent to be recouped?

[Clive]

Mr Simpson sounds like a right eejit.

What's idiotic about wanting some of the money spent to be recouped?

It’ll get recouped when it’s sold. There’s scant profit right now to remove from the operating cash in hand as I’m sure Bearsden will confirm. Obviously Homer is on that committee to make problems rather than help to save the facility, associated jobs and the economic input of the site.

And the article says it’s back up for sale. It never wasn’t.